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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

3 'Quite Attractive' Regional Bank Value Plays from UBS

Stocks in this article: BAC C JPM FITB KEY CMA

Fifth Third Bancorp
Shares of Fifth Third Bancorp (FITB) of Cincinnati closed at $12.72 Monday, returning 1% year-to-date, following an 11% decline last year.

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Based on a quarterly payout of eight cents, the shares have a dividend yield of 2.52%.

The shares trade for 1.1 times their reported March 31 tangible book value of $11.64, and for 8.5 times the consensus 2013 EPS estimate of $1.50. The consensus 2012 EPS estimate is $1.49.

UBS's price target for Fifth Third is $16. The firm on Tuesday raised its 2012 EPS estimate for Fifth Third by three cents to $1.51, "in order to account for continued strength in mortgage banking," while also raising its 2013 EPS estimate by three cents, to $1.63.

Scinicariello said that during the first quarter, Fifth Third's "run rates for fee income and expenses improved and it will be important for FITB to maintain these levels." Fifth Third's guidance calls for expenses to decline by $15 million during the second quarter from $973 million last quarter while UBS models "a $7MM reduction to $965.6MM."

The analyst expects Fifth Third's net interest margin to "decline by 8bps this quarter to 3.53% (slightly worse than the 5-6bps guided to) and would anticipate some improvement in forward guidance due to trust preferred redemptions (>$1.4B in 2012)."

Scinicariello also expects "loan growth (1.5% sequentially)" and said that "improved guidance on this front" from KeyCorp's management "could be a key driver."

Interested in more on Fifth Third Bancorp? See TheStreet Ratings' report card for this stock.

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